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Joined: Jun 2017
Posts: 7,104 Likes: 17
The Flippin’ Idiot That Could Care Less
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The Flippin’ Idiot That Could Care Less
Joined: Jun 2017
Posts: 7,104 Likes: 17 |
I'm thinking about paying my house off completely off at 44yrs old.
Zero inheritance I had.
My dad bought me a truck when I was 16 and my parents fed and clothed me and I been working since I could walk.
I came from a poor family not silver spoon unfortunately 😂
I owe $106k,600 on my house
Locked interest rate is 3.62 percent
I bought it in 2018
I Divorced and kept the house and our son and I started over
My question is, should I pay it off?
I'm bleeding out $69 a month for mandatory flood insurance until I pay the mortgage off and can drop it. I definitely don't need flood, I'm in the 1 percent zone, it's a racket scam that's cost me 3k cash dealing with FEMA just to get jerked around and denied after I filled to the correct elevation.
I have $71k cash saved up
I'm thinking about putting 60k cash on the mortgage payment and drawing out $45k out of my 401k.
Should I do that y'all?
It will wipe me out but I think the stock market is gonna crash. The money I could lose on the market would basically pay my balance off if I put 60k cash with it.
That will leave me with about $11k cash and maybe a few grand left over in my 401k.
Other than my mortgage I'm completely debt free
My credit score is 765 if I ever need to borrow I'm ok
I have credit cards and don't use them
I have a nice car and truck that I paid off last year
Good little boat
I love my job, make over $31 an hour
I know I will pay penalties but I'm bleeding out $69 for flood insurance til I pay the house off
My interest on the house is $320 a month so I'm losing $390 a month on interest and flood insurance.
I'm a bulldozer operator so I don't get paid when it's too wet to work so I don't make a lot of steady money I should say
if I didn't love it I'd quit but I've been doing it since 2005 basically.
Any advice would be grateful. Thankyou
Last edited by Jakethesnake; 08/11/26 08:52 AM.
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Joined: Aug 2001
Posts: 81,844 Likes: 513
GUVNER
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GUVNER
Joined: Aug 2001
Posts: 81,844 Likes: 513 |
Maybe you should consider making double or triple payments for a couple of years so you dont have to hit the 401k. Then when you have bitten a big enough chunk out of it to avoid the 401k, reassess your position.
"Never Trust Government" -- Smart people.
"The Great thing we should Fear and the Weird Thing we Trust is Elon Musk" -- Me
"You can be broke but you cant be poor." -- Ruthie-May Webster
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Joined: Aug 2013
Posts: 5,084 Likes: 3
12 point
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12 point
Joined: Aug 2013
Posts: 5,084 Likes: 3 |
Maybe you should consider making double or triple payments for a couple of years so you dont have to hit the 401k. Then when you have bitten a big enough chunk out of it to avoid the 401k, reassess your position. This right here. Jake I love the way you're thinking - really - but the 401k hit makes me cringe bigly.
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Joined: Sep 2003
Posts: 13,162 Likes: 196
Doing the best I can.
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Doing the best I can.
Joined: Sep 2003
Posts: 13,162 Likes: 196 |
Compare the amount you will lose by drawing that 401K to the amount you will save on interest by paying the mortgage off earlier and go from there. If you're losing more by drawing out the 401K, then you are better off making the payment.
The true mark of a man is not how he conducts himself during times of prosperity, but how he conducts himself during times of adversity.
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Joined: Aug 2015
Posts: 1,371 Likes: 9
8 point
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8 point
Joined: Aug 2015
Posts: 1,371 Likes: 9 |
I would imagine your 401K is earning quite a bit more than the 3.62 percent the loan is at.
I would leave the retirement money compounding at the higher interest rate over time.
Double up on your payments if you can and take the tax advantage on the mortgage interest when filing taxes.
Plus unless your over 59 1/2 you're going to pay a penalty on early withdrawal from 401k.
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Joined: Oct 2009
Posts: 7,068 Likes: 50
14 point
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14 point
Joined: Oct 2009
Posts: 7,068 Likes: 50 |
I would do the math, if you keep your 401k, where will you be in 20 years vs cashing out and starting over. The first 100 grand is the hardest to save.
"And the days that I keep my gratitude
Higher than my expectations
Well, I have really good days" Ray Wylie Hubbard
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Joined: Aug 2014
Posts: 22,815 Likes: 197
Impatient Stinky Britches Wearin’ Off-Roadin’ Guru
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Impatient Stinky Britches Wearin’ Off-Roadin’ Guru
Joined: Aug 2014
Posts: 22,815 Likes: 197 |
Compare the amount you will lose by drawing that 401K to the amount you will save on interest by paying the mortgage off earlier and go from there. If you're losing more by drawing out the 401K, then you are better off making the payment. Additionally, if you decide that depleting the retirement savings to pay it off is beneficial, make sure you are reinvesting that "mortgage payment" every month back into a retirement plan, don't just consider it a $1500/month (or however much/month it is) "raise". Theoretically you shouldn't be banking any more money every month than you currently are - it should come out as a wash. The only difference is you're paying into a retirement account instead of paying the bank for a mortgage. With that said, your interest rate is relatively low so I'm guessing most investment accounts are giving you a higher return than that...I think the average long-term 401k return is roughly 6-8% so in theory, your money makes more sitting there than it loses in mortgage interest
Isaiah 5:20
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Joined: Jan 2001
Posts: 14,897 Likes: 92
Booner
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Booner
Joined: Jan 2001
Posts: 14,897 Likes: 92 |
Keep the money invested. Remember the mortgage interest is tax deductible. $11k is not much of a buffer.
You are doing well.
Last edited by wew3006; 08/11/26 08:48 AM.
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Joined: Jun 2017
Posts: 7,104 Likes: 17
The Flippin’ Idiot That Could Care Less
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The Flippin’ Idiot That Could Care Less
Joined: Jun 2017
Posts: 7,104 Likes: 17 |
I forgot to add a key component to this
I just edited it in the original post
When it rains I don't get to work
I don't get paid
That's the only downfall to my job is it's based off weather
I'm a bulldozer operator doing land development
if I didn't live it I'd go find a steady job that doesn't involve rain day's
Last edited by Jakethesnake; 08/11/26 08:52 AM.
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Joined: Jul 2020
Posts: 951 Likes: 19
6 point
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6 point
Joined: Jul 2020
Posts: 951 Likes: 19 |
pay it off.. best decision I ever made at 40..
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Joined: Sep 2012
Posts: 24,103 Likes: 296
Freak of Nature
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Freak of Nature
Joined: Sep 2012
Posts: 24,103 Likes: 296 |
Don't touch the 401 K.
Invest the money which will earn more that the 3% interest your paying on the mortgage.
Dying ain't much of a living boy...Josey Wales
Molon Labe
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Joined: Aug 2014
Posts: 22,815 Likes: 197
Impatient Stinky Britches Wearin’ Off-Roadin’ Guru
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Impatient Stinky Britches Wearin’ Off-Roadin’ Guru
Joined: Aug 2014
Posts: 22,815 Likes: 197 |
One caveat.....I know paying it off isn't always the best choice from a purely mathematical perspective, but peace of mind is worth something.
Our interest rate is like 3.2% I think...low-3's anyway. If I came into a large sum of money today, I don't think I'd pay it off, but I certainly wouldn't blame someone who would. Again, if you do, you just have to be diligent about reinvesting as much money as quickly as possible because you'll be playing catch-up on your retirement savings for quite a while
Isaiah 5:20
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Joined: Nov 2005
Posts: 8,189 Likes: 113
14 point
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14 point
Joined: Nov 2005
Posts: 8,189 Likes: 113 |
Plug all of that into chatGTP and just see what it tells you, but I’m of the opinion you pay it off
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Joined: Apr 2010
Posts: 3,982 Likes: 26
10 point
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10 point
Joined: Apr 2010
Posts: 3,982 Likes: 26 |
Maybe you should consider making double or triple payments for a couple of years so you dont have to hit the 401k. Then when you have bitten a big enough chunk out of it to avoid the 401k, reassess your position. This
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Joined: Apr 2010
Posts: 3,982 Likes: 26
10 point
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10 point
Joined: Apr 2010
Posts: 3,982 Likes: 26 |
I paid mine off early making double payments
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Joined: Feb 2013
Posts: 8,618 Likes: 20
14 point
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14 point
Joined: Feb 2013
Posts: 8,618 Likes: 20 |
With your income being volatile, I would calculate what you need to live and pay the necessities for 6 months. Put this amount away in an interest bearing account. Never touch it unless you are in dire straights. Beyond that, I would keep a reasonable amount, maybe $10k in a checking or accessible savings account. Anything left over, throw towards a principal only payment on your mortgage. Absolutely would not draw from your 401k. Once those actions are taken & structure setup, I'd get on a budget & make sure to divert money towards investments + swing some extra towards the principal on your mortgage.
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2 members like this:
BAR1225, leroycnbucks |
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Joined: Dec 2002
Posts: 14,332 Likes: 65
Booner
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Booner
Joined: Dec 2002
Posts: 14,332 Likes: 65 |
I also like to keep a good bit of cash on hand.
A new AC unit or a kids vehicle, etc. I’d want to keep (at least) 30,000 on had in some sort of savings account.
Double up payments and you’ll be amazed, plus you won’t spend your savings.
Everything woke turns to shucks
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Joined: Feb 2013
Posts: 8,396 Likes: 20
14 point
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14 point
Joined: Feb 2013
Posts: 8,396 Likes: 20 |
Actually, at that interest rate I would take a completely different approach. You can invest that money and make 8% pretty safely, thats a 4+% profit. If it rains, you have an account with funds you can fall back on.
I don't want to pass quietly into the night. I want to slide in sideways kickin and screamin
Life really is awesome ... Soak it up while you can ...
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Joined: Nov 2025
Posts: 17
spike
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spike
Joined: Nov 2025
Posts: 17 |
I payed mine off at 39 and never looked back. Insurance was getting crazy and now most mortgage and insurance companies in Florida, want a roof that's 10 years old or less. We'll give it to our daughter and she can have a good start with a debt free life in about 16+ years. I also asked them how much they would take off, If I payed out early and they took off a surprising amount
Last edited by Stevenattsu; 08/11/26 09:17 AM.
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Joined: Oct 2012
Posts: 1,882 Likes: 15
8 point
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8 point
Joined: Oct 2012
Posts: 1,882 Likes: 15 |
With your income being volatile, I would calculate what you need to live and pay the necessities for 6 months. Put this amount away in an interest bearing account. Never touch it unless you are in dire straights. Beyond that, I would keep a reasonable amount, maybe $10k in a checking or accessible savings account. Anything left over, throw towards a principal only payment on your mortgage. Absolutely would not draw from your 401k. Once those actions are taken & structure setup, I'd get on a budget & make sure to divert money towards investments + swing some extra towards the principal on your mortgage. This right here. You're beating or at least equaling inflation on the house payment. I understand the volatile nature of your work... but like Atoler says, direct any extra monthly to the principal on the loan. Do not remove any from the 401K... did that years ago and lived to regret it.
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